Wash Post: “Retail group's analysis paints dire image of a VAT”
Get the latest intel on Washington's fiscal woes.Close
ICYMI: The Washington Post’s “Retail group’s analysis paints dire image of a value-added tax”
Below is an excerpt; please click on the link above to read the entire article.
Piling a European-style sales tax on top of the existing U.S. tax structure would immediately destroy 850,000 jobs and damage retail spending for years to come, according to an economic analysis commissioned by the National Retail Federation, a leading trade group.
The report studied the potential effect of a 10.3 percent value-added tax, or VAT, a form of sales tax applied at every stage of production. The tax is ubiquitous around the world, having been adopted in more than 130 countries.
NRF president Matthew Shay said the study is intended to push back against what he views as a rising tide of interest in the VAT in Washington, where policymakers are eager to reduce record budget deficits.
“Supporters claim a VAT is the solution to the nation’s economic ills, but nothing could be further from the truth,” said Shay, who represents an industry that has long opposed a value-added tax. “This report has found that a VAT would have negative economic consequences for most working Americans alive today.”
Shay said the NRF will submit the study to the bipartisan commission President Obama has appointed to develop a deficit-reduction plan. The commission is scheduled to issue its report in December. Shay said his group grew nervous about the value-added tax after seeing public comments from commission members, including co-directors Erskine Bowles and Alan Simpson.